There are two big theoretical pluses to local processing:
One) local processing should run faster because it doesn't have to go out to the cloud and come back
Two) local processing will continue to run even if the SmartThings cloud is unavailable
However, there's an old engineering saying:
in theory, there isn't much difference between theory and practice, but in practice there usually is.
Many people have reported that their locally operating devices ran slower than their cloud processing devices. It may be that the hub's local processing just isn't very efficient.
The second benefit does apply. It's a very limited number of devices, and you won't be able to do anything with the mobile app on your phone if the cloud is not available to your hub (even if your phone and hub are on the same local network), but it's a feature that is important to some community members.